Sunday, 17 November 2019

A Ghanaian company, which started as commodity trading company but now oil operator, says it has made history by becoming the first independent African energy group
to discover oil in deep water after its drilling revealed significant
quantities of oil off the coast of Ghana.

The Springfield Group,
which has no history of oil exploration, will in the next few days announce it
has made two discoveries totalling 1.2bn barrels of crude in a block that it
says will be bigger than the Jubilee field, Ghana’s biggest.

The Jubilee field,
operated by the UK’s Tullow Oil, is one of Africa’s largest recent finds and
propelled Texas-based Kosmos Energy, which discovered it in 2007, to a New York
and subsequent London listing.

Ghana expects to be
producing about 250,000 barrels of oil a day by next year, which would make it
the fourth-largest producer in sub-Saharan Africa. If Springfield’s claims are
confirmed, the new discovery could significantly boost production in the west
African country.

“We are the first
African company to drill in deep water and to find oil,” said Kevin Okyere,
Springfield’s chief executive and a former telecoms entrepreneur. “Nigeria has
had oil for a long time and no indigenous company there has ever done this.”

Mr Okyere said Nana
Akufo-Addo, Ghana’s president, would join a ceremony to announce the find.
Ghana’s government has an 18 per cent stake in the block.

“It has become a
matter of national pride now,” Mr Okyere said.

A senior official in
the finance ministry confirmed the government had been informed about the
discovery.

Springfield said it
had drilled two wells in the past 40 days and hit oil in both. Of the 1.2bn in
proven reserves, it said, 30-35 per cent would be recoverable. There were also
commercially viable quantities of gas, it said.

“These numbers are
still very early days,” said Lennert Koch, principal sub-Saharan analyst at
Wood Mackenzie, an energy consultant. “But if it is in that range, it is what
we would call a significant discovery.”

Mr Koch said
Springfield would need partners to help with both finance and technical
development of the field. He doubted whether Ghana had the capacity to use more
gas.

Springfield was given
the block, known as West Cape Three Points Block 2, by Ghana’s government in
2016 after it was relinquished by Kosmos. The US company, which had drilled the
block without finding oil, had returned it to Ghana following a protracted
dispute with the government.

Springfield was
awarded the block for free, but said it had invested well over US$100 million
in exploration and drilling.

Mr Okyere acknowledged
there might be scepticism about how a small, inexperienced Ghanaian company had
found oil in a block abandoned by Kosmos, a group known for its discovery
capabilities.

“A little African
company says there’s oil when Kosmos said there’s no oil,” he said, conceding
that prospective partners would demand independent verification.

Brandishing a small
jar of the “extremely light” crude, Mr Okyere said it had been discovered at a
depth of 3,323m in waters about 1,000m deep. Although that is deep, it is
within modern drilling capabilities.

Springfield said it had
already been in talks with potential partners, and did not rule out an initial
public offering in either London or New York as a way of raising funds to
develop the field.